Ben Bernanke’s QE3 Will Not Reverse Global Economic Crisis

September 19th, 2012

As expected, stock markets around the world swooned to the heavens after the Federal Reserve announced its third dose of quantitative easing. Ben Bernanke had already unleashed QE1 and QE2, with only short-tem, temporary stabilization of the financial and economic crisis still raging in the U.S. and Europe. What to make of Bernanke’s third version of quantitative easing? As Albert Einstein once said, the definition of insanity is repeating the same thing, over and over again, and expecting a different result.

The public is largely ignorant of what quantitative easing is ( and what it is not). It is simply money printing by a central banking, focused on using the artificially created liquidity to purchase sovereign or private sector debt instruments or depreciated assets, with the view of alleviating market conditions, such as countering high yields on government bonds. It is no substitute for sound economic and fiscal policies, and repeated doses of quantitative easing are inflationary, and typically create distorted asset bubbles.The tech bubble of the 1990s,and the housing bubble that unleashed the global financial crisis of 2008, were the result of easy money policies by the Fed.

Now we again have easy money intrusions into the market through the Fed, this time through QE3.The only tangible result so far is the creation of a new bubble-the equity bubbleon Wall Street and beyond. As before, this bubble will not resolve the economic crisis afflicting most of the world, and will likely make it worse.

In a world dominated by high finance, how far would Wall Street go in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.